| Securing private investment to help Peru's poor
Huancavelica, Peru — Chemonics International has helped USAID/Peru secure more than a million dollars from a private company to fund business development programs in Huancavelica, one of Peru’s poorest departments.
Chemonics manages the innovative poverty reduction and alleviation (PRA) project for USAID/Peru. Since 1999, the project has operated economic service centers in 10 “economic corridors” throughout Peru — geographic areas linked by the movement of goods, services, and people.
The success of the centers, which are raising income and private investment in economic corridors, caught the eye of one of Latin America’s largest gold and silver mining companies, Compañia Minera Buenaventura. Wanting to give back to the communities where it works, Buenaventura has funded an additional economic service center in Huancavelica, the hub of its operations, under a cooperation agreement with USAID.
Buenaventura will provide more than $1 million over four years to finance the Huancavelica center. Under Chemonics’ technical direction, the center is operated by a private university and two Peruvian private voluntary organizations. Like the other centers, it provides information on markets, facilitates trade through contacts between buyers and local producers, and identifies companies willing to invest in local enterprises.
Since it began working in the 10 economic corridors, the project has helped increase the net sales of producers by more than $17 million, create 2.3 million days of employment, and boost total investment by over $2.4 million.
USAID recently showcased the initiative as an example of successful partnership under its Global Development Alliance. Introduced in 2001, the Alliance seeks to maximize the impact of development assistance by pooling the ideas and resources of both the public and private sectors.
“We are very pleased that, together, one of Peru’s most successful companies and USAID/Peru have recognized the success that Chemonics has had in applying a business approach to expanding economic activity, generating jobs, and reducing poverty in some of the most depressed areas of the country,” said the project’s director, Jim Riordan.
The project also received accolades from an independent panel of judges in a nationwide competition for “creativity in development.” The prize, which Chemonics and USAID received in a televised Oscar-like ceremony, recognized the project’s innovative approach to poverty reduction.
The project is boosting income and private investment by helping clients respond to specific market-driven demands. More importantly, it is generating sustainable jobs, which ultimately is the permanent solution to poverty.
The approach taps into commercial networks linking rural areas with secondary cities, and secondary cities with the demands of global markets. Through technical assistance, market information, and business development services, Chemonics helps local businesses expand and employ more people in the areas that need it most.
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